Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Power Sector Financial Recovery Program (P157571) EUROPE AND CENTRAL ASIA | Armenia | Energy & Extractives Global Practice | IBRD/IDA | Program-for-Results | FY 2016 | Seq No: 2 | ARCHIVED on 01-Jun-2017 | ISR25361 | Implementing Agencies: Public Services Regulatory Commission, Ministry of Energy and Natural Resources, Ministry of Finance of the Republic of Armenia, Ministry of International Economic Integration and Economic Reforms Program Development Objectives Program Development Objective (from Program-for-Results Appraisal Document) The proposed Program Development Objective is to support the Borrower’s efforts to ensure adequate and reliable electricity supplythrough improvement of the financial standing of the state-owned power generation companies and the private power distribution company. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Highly Satisfactory Overall Implementation Progress (IP)  Satisfactory  Highly Satisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions Implementation of all activities under the government's financial recovery plan is on track. All of the targets under Disbursement Linked Indicators (DLIs) for the second semester of 2016 were achieved. The financial standing of the state-owned power generation companies (Armenian Nuclear Power Plant and Yerevan Thermal Power Centre) and the private power distribution company (Electric Networks of Armenia) has been improving. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P157571 IBRD-86150 Effective USD 30.00 30.00 0.00 24.58 5.42 82% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P157571 IBRD-86150 Effective 27-Apr-2016 12-May-2016 19-Jul-2016 30-Jul-2021 -- Risks Systematic Operations Risk-rating Tool 6/1/2017 Public Disclosure Copy Page 1 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  Moderate  Moderate  Moderate Macroeconomic  Substantial  Substantial  Substantial Sector Strategies and Policies  Substantial  Moderate  Moderate Technical Design of Project or Program  Low  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  Moderate  Moderate  Moderate Fiduciary  Substantial  Moderate  Moderate Environment and Social  Low  Low  Low Stakeholders  Substantial  Substantial  Substantial Other  Moderate  Moderate  Moderate Overall  Substantial  Substantial  Substantial Disbursement Linked Indicators (DLI) PHDLIPDOTBL DLI 1: Decision at the shareholder meetings of ANPP and YTPC, prohibiting the non-core business related expenditures, lending and borrowing by the above companies. (Text) Baseline Actual (Previous) Actual (Current) Value No decision -- Decision was made Date 01-Feb-2016 -- 01-Mar-2017 Comments No target under this DLI for second semester of 2016. PHDLIPDOTBL  DLI 2: Liquidation of Haigasard (Text) Baseline Actual (Previous) Actual (Current) Decision on liquidation is made and liquidation plan was Value Exists as legal entity -- approved by the Shareholder's Meeting. Date 01-Mar-2016 -- 01-Mar-2017 Comments The DLI target for second semester of 2016 was met. 6/1/2017 Public Disclosure Copy Page 2 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) PHDLIPDOTBL  DLI 3: No new non-core business related expenditures, borrowing and lending incurred by ANPP (Text) Baseline Actual (Previous) Actual (Current) ANPP incurs non-core Value -- No information yet business related expenditures Date 01-Feb-2016 -- 01-Mar-2017 Comments The verification will be done by IVA/independent auditor of the annual financial statements of ANPP. The information whether ANPP incurred any new non-core business related expenditure during the period from the date of the Loan Agreement (May 12, 2016) and December 31, 2016 will be available by June 30, 2017 together with the audit report. PHDLIPDOTBL  DLI 4: No new non-core business related expenditures, borrowing and lending incurred by YTPC (Text) Baseline Actual (Previous) Actual (Current) YTPC incurs non-core Value -- No information yet business related expenditures Date 01-Feb-2016 -- 01-Mar-2017 Comments The verification will be done by IVA/independent auditor of the annual financial statements of YTPC. The information whether YTPC incurred any new non-core business related expenditure during the period from the date of the Loan Agreement (May 12, 2016) and December 31, 2016 will be available by June 30, 2017 together with the audit report. PHDLIPDOTBL  DLI 5: Reduction of principal amount of outstanding commercial loans of ANPP (in million US$) (Amount(USD)) Baseline Actual (Previous) Actual (Current) Value 0.00 -- 8.52 Date 01-Feb-2016 -- 01-Mar-2017 PHDLIPDOTBL  DLI 6: Reduction of principal amount of outstanding commercial loans of YTPC (in million US$) (Amount(USD)) Baseline Actual (Previous) Actual (Current) Value 0.00 -- 4.60 Date 01-Feb-2016 -- 01-Mar-2017 6/1/2017 Public Disclosure Copy Page 3 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) PHDLIPDOTBL  DLI 7: Reduction of YTPC's gas payable under Contract referred to in Supplemental Letter No. 3 (in AMD) (Number (Thousand)) Baseline Actual (Previous) Actual (Current) Value 12160000.00 -- 0.00 Date 01-Feb-2016 -- 01-Mar-2017 Comments The Borrower exceeded the target. Specifically, the outstanding balance of the payable under this particular contract reference in the Supplemental Letter No. 3 was reduced to 0. The final year target was AMD3.86 billion. PHDLIPDOTBL DLI 8: ENA’s margin for each new tariff period fully reflects the loss (revenue) accrued due to difference between the forecast and actual cost of electricity purchased by ENA during the preceding tar (Text) Baseline Actual (Previous) Actual (Current) Value No -- Yes Date 01-Feb-2016 -- 01-Mar-2017 Comments No target under this DLI for second semester of 2016. PHDLIPDOTBL DLI 9: Tariffs for YTPC and Hrazdan TPP for each new tariff period fully reflect the loss (revenue) resulting from difference between forecast and actual cost of purchased natural gas due to fluctuati (Text) Baseline Actual (Previous) Actual (Current) Value No -- Yes Date 01-Feb-2016 -- 01-Mar-2017 Comments No target under this DLI for second semester of 2016. PHDLIPDOTBL  DLI 10: Electricity supplied by YTPC (Text) Baseline Actual (Previous) Actual (Current) Value 1400 GWh -- The generation target was met. Date 01-Feb-2016 -- 01-Mar-2017 Comments The target for 2016 was met. 6/1/2017 Public Disclosure Copy Page 4 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Results Results Area Intermediate Results Area Project Development Objective Indicators PHINDPDOTBL  Total annual electricity supply by ANPP is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2300 GWh Too early to measure 2195 GWh 2300 GWh Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 30-Jun-2021 Comments The slight shortfall in annual generation was not caused by financial difficulties. It was a result of longer-than-planned refueling period and recurrent repair. PHINDPDOTBL  Total annual electricity supply by YTPC is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1400 GWh Too early to measure 1381 GWh 1400 GWh Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 30-Jun-2021 Comments The small shortfall in annual generation was not caused by financial distress. YTPC was on stand-by, but was not dispatched by the power system operator at planned schedule during the summer months given availability of low-cost hydropower due to favorable hydrology conditions. The readiness of YTPC to immediately start generating after the notice from the power system operator was validated by review of capacity charges received from Electric Networks of Armenia. This means that the power plant was technically capable to start generating when instructed. 6/1/2017 Public Disclosure Copy Page 5 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) PHINDPDOTBL  Average interruption frequency per year in the project area is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.10 1.11 1.11 at least 1.1 Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 30-Jun-2021 PHINDPDOTBL  Customers served in the project area (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 1,040,000.00 1,040,000.00 1,040,000.00 1,040,000.00 PHINDPDOTBL  Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3,018,000.00 3,018,000.00 3,018,000.00 3,038,000.00 Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 30-Jun-2021 PHINDPDOTBL  Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 1,618,000.00 1,618,000.00 1,618,000.00 1,628,368.00 Overall Comments Intermediate Results Indicators 6/1/2017 Public Disclosure Copy Page 6 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) PHINDIRITBL  No new non-core business related expenditures, borrowing and lending incurred by ANPP (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Not known yet Not known yet Yes Date 01-Mar-2016 30-Jun-2016 01-Mar-2017 31-Dec-2020 PHINDIRITBL  No new non-core business related expenditures, borrowing and lending incurred by YTPC (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Not known yet Not known yet Yes Date 01-Mar-2016 30-Jun-2016 01-Mar-2017 31-Dec-2020 PHINDIRITBL  Liquidation of Haigasard (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Decision on liquidation was made and Value No No liquidation plan was Liquidation i approved by the Shareholder’s Meeting. Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 31-Dec-2020 PHINDIRITBL  Reduction of cash deficit of ANPP due to the Program (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.50 10.50 No deficit No deficit Date 01-Mar-2016 30-Jun-2016 01-Mar-2017 31-Dec-2017 PHINDIRITBL  Reduction of cash deficit of YTPC due to the Program (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 85.40 60.00 41.30 44.80 Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 31-Dec-2020 6/1/2017 Public Disclosure Copy Page 7 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) PHINDIRITBL  Reduction of the principal amount of outstanding commercial loans of ANPP to be refinanced under the Program (million US$) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.50 8.50 8.50 Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 31-Dec-2017 PHINDIRITBL  Reduction of the principal amount of outstanding commercial loans of YTPC to be refinanced under the Program (milion US$) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4.60 4.60 4.60 Date 01-Feb-2016 30-Jun-2017 01-Mar-2017 31-Dec-2017 PHINDIRITBL  Recovery of ANPP’s receivables from ENA (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 12.00 15.00 15.00 Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 31-Dec-2016 PHINDIRITBL  Recovery of YTPC’s receivables from ENA (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 18.00 25.00 25.00 Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 31-Dec-2016 PHINDIRITBL  Reduction of YTPC's gas payable under Contract referred to in Supplemental Letter No. 3 (in billion AMD) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 12.16 12.16 2.26 3.86 Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 31-Dec-2020 6/1/2017 Public Disclosure Copy Page 8 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) PHINDIRITBL Loss (profit) at the private power distribution company due to difference between actual and forecast cost of electricity purchased. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Will be confirmed by IVA Value Yes No report due by July 30, No 2017. Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 30-Jun-2021 PHINDIRITBL Loss (profit) at YTPC due to US$/AMD exchange rate fluctuation driven changes to AMD denominated payments for natural gas. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Will be confirmed by IVA Value Yes No report due by July 30, No 2017. Date 01-Mar-2016 30-Jun-2016 01-Mar-2017 31-Dec-2020 PHINDIRITBL  Percent of tariff-setting related questions and inquiries (gender-disaggregated) responded to by PSRC within stipulated service standards for response time (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100% 100% 100% 100% Date 01-Mar-2016 30-Jun-2016 01-Mar-2017 31-Dec-2020 PHINDIRITBL  Overhaul of the gas turbine at YTPC’s CCGT plant (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The contract for Value n/a too early to measure Overhaul is c overhaul was signed. Date 01-Feb-2016 30-Jun-2016 01-Mar-2017 31-Dec-2018 Overall Comments 6/1/2017 Public Disclosure Copy Page 9 of 9